EU offers Egypt €1bn

EU leaders yesterday offered Egypt more than €1 billion in aid and the prospect of better terms of trade during the first visit to Brussels by an Egyptian president.

Herman Van Rompuy, the president of the European Council, emphasised the importance of consolidating Egypt’s transition to democracy, saying: “Success in Egypt would have positive repercussions on the region as a whole.”

After his meeting with Egypt’s Mohammad Morsi, Van Rompuy described Egypt “as a friend, a neighbour, a partner” that could count on EU support during its democratic transition.

José Manuel Barroso, the European Commission’s president, said that Morsi, a long-time leader of the Islamist Muslim Brotherhood who became president on 30 June, had an “unwavering commitment” to democracy.

In his comments, Morsi specifically mentioned his support for Egypt’s large Christian minority and for women, whose rights he described as “very important to us”.

The visit to Brussels by Morsi came amid violent anti-US protests that led to the killing of the US ambassador and three other US diplomats in Libya.

Morsi condemned both the spur for the violence – a US film portraying the Prophet Mohammad as a killer and child abuser – but also condemned the killings in Libya.

“We Egyptians reject any kind of assault or insult against our Prophet,” he said, but added: “It is our duty to protect our guests and visitors from abroad.”

“We will not allow such destructive acts in Egypt,” the president said.

On Tuesday (11 September), protesters in Cairo managed to enter the compound of the US embassy.

EU financial support

Barroso said that the EU would make €449 million available to Egypt by 2013 to enable Egypt and its people to “seize the opportunities and build a better future” and would give €150m-€200m to support Egypt’s budget.

Egypt in February asked the Commission for aid worth around €500m.

Barroso also said the EU would be “willing to do much more”, if the International Monetary Fund (IMF) also pledges a substantial loan. Egypt last month asked the IMF for a $4.8bn (€3.7bn) loan and hopes to reach agreement by the end of the year. Egypt’s foreign-currency reserves plummeted last year amid concern on the part of investors about Egypt’s stability.

Barroso also said that the EU is willing to start negotiations on a "deep" free-trade deal. Roughly one-third of Egypt’s exports currently go to the EU, making the EU Egypt’s largest trading partner.

In 2011, Egypt’s exports to the EU were worth €9.4bn. Its imports from the EU totalled €13.9bn.

Egypt is particularly keen to develop ties in its agricultural and energy sectors.

A taskforce created by the two sides is due to meet on 14-15 November to identify areas where the EU could provide more political and economic support.

Egypt is also seeking to recover assets deposited in Europe by Egypt’s deposed long-time leader, Hosni Mubarak. Mubarak is thought to have stowed as much as $10bn (€7.7bn) abroad.

Morsi has previously travelled to Saudi Arabia, China and Iran. Egypt’s prime minister, Hisham Qandil, has also been travelling abroad – to the US – to encourage investment.